10 Biggest Tech Headlines in 2012

The year began with a rough start for digital locker site Megaupload. The site allowed users to upload digital files in virtual lockers and share those files with others. Files could be anything from pictures to documents to media files. And that's where the trouble began.

Organizations like the Motion Picture Association of America (MPAA) accused Megaupload of allowing -- or even encouraging -- people to illegally share copyrighted material on the site. A user could take a movie file, upload it to Megaupload and give free access to anyone. The FBI and other law enforcement agencies accused Megaupload of paying certain users to upload illegal material. The files brought a lot of Web traffic to the Megaupload site, which generated revenue both from serving up ads on the site and offering a subscription service that would give users access to faster download speeds.

In January 2012, the FBI struck. In a coordinated raid, the FBI shut down servers in the United States that hosted Megaupload and, coordinated efforts with police in New Zealand to raid the homes of some of Megaupload's top employees. One of those was Kim Dotcom, founder of Megaupload. Law enforcement seized millions of dollars worth of equipment and goods, including luxury cars and works of art.

Later in the year, a New Zealand court ruled that the raid on Kim Dotcom's estate was illegal [source: Anderson]. Further complicating the matter is the fact that Kim Dotcom is a Dutch citizen living in New Zealand. The company itself is legally based in Hong Kong. The global nature of the case brings into question how far the FBI's jurisdiction can stretch.

The ramifications of the raid are still playing out in courtrooms and on the Web, and there are many questions without answers. Did the FBI overstep its bounds in this global operation? Should copyright holders be able to influence law enforcement activities to this extent? Is piracy such a problem that it requires operations like the Megaupload raid? And does the raid solve any problems at all?